How October 2025 AML reforms will impact the real economy
From financial controls to industrial supply chains, Canada’s new AML reforms redefine transparency across all sectors.
🔹 1. The context: Canada enters a new enforcement era
Canada is tightening its anti–money laundering (AML) regime as it prepares for the Financial Action Task Force (FATF) mutual evaluation scheduled for late 2025.
The federal government, through amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and the introduction of Bill C-2 “Strong Borders Act”, is expanding the scope and reach of AML obligations across the economy.
These changes are not theoretical. They introduce new reporting entities, higher penalties, and wider enforcement powers for FINTRAC, signaling a decisive shift from guidance to obligation.
🔹 2. Key reforms taking effect in October 2025
October 2025 represents a pivotal moment for compliance in Canada. Several new provisions under the PCMLTFA come into force, broadening the definition of what it means to be a reporting entity and expanding reporting obligations to sectors previously outside the regulatory spotlight.
Among the most significant changes:
- New reporting entities: Title insurers and ATM acquirer services (private automated banking machines) officially become subject to FINTRAC oversight.
- Sanctions reporting: Entities must immediately report to FINTRAC any property or assets belonging to individuals or organizations designated under the Criminal Code, United Nations Act (UN Act), Special Economic Measures Act (SEMA), or Justice for Victims of Corrupt Foreign Officials Act (JVCFOA).
- Sanctions evasion: Reporting of suspected sanctions evasion becomes mandatory, adding a new dimension to existing suspicious transaction requirements.
- Information sharing: Reporting entities can now share information with each other, without client consent, under a registered Code of Practice — a significant change in inter-institutional cooperation.
Together, these reforms demonstrate that Canada is no longer relying on voluntary compliance — it is enforcing demonstrable control, documentation, and accountability.
🔹 3. Beyond finance: implications for the productive economy
While these reforms target high-risk sectors, their ripple effects extend deep into manufacturing, automotive, logistics, and industrial supply chains.
The reason is structural: banks and financial intermediaries are now required to verify the origin, destination, and ownership of funds from all corporate clients.
This means that any company managing accounts, credit lines, or export financing must be ready to substantiate its internal controls, ownership structures, and the lawful origin of its capital.
In practice:
- Financial institutions will increasingly request beneficial ownership declarations and basic AML/compliance policies.
- Cross-border payments and intragroup transfers — especially between Canadian and Mexican entities — will be subject to greater scrutiny.
- Companies without formal compliance documentation may face delays in financing, audits, or even service interruptions.
🔹 4. Supply chain integrity under the new regime
AML expectations now intersect with ESG, sanctions compliance, and supply chain integrity.
Both FATF and FINTRAC stress the need to monitor transactions that could conceal irregular or sanctioned flows — even within legitimate commercial networks.
For example, an automotive manufacturer importing components from multiple jurisdictions could be exposed if a supplier or logistics partner appears on international sanctions lists under the UN Act, SEMA, or JVCFOA.
This convergence means industrial companies must strengthen:
- Due diligence on suppliers and customers.
- Controls over international payments and intermediaries.
- Internal ethics and compliance policies, ensuring procurement and finance teams operate under shared risk criteria.
🔹 5. Financing, exports, and the cost of non-compliance
Access to credit, factoring, and export programs is increasingly conditional on having documented AML and compliance frameworks.
Financial institutions, export agencies, and trade finance providers are aligning with FATF and FINTRAC standards — meaning a missing policy can now translate into a denied facility.
This is not just a compliance issue; it’s an operational risk.
Inadequate transparency can affect access to funding, delay transactions, and damage reputational credibility with global partners.
🔹 6. A regional alignment: Canada and Mexico converge
Mexico underwent a similar transformation a decade ago with its LFPIORPI (Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita).
Initially limited to “vulnerable activities,” it quickly became a broader standard of transparency affecting real estate, construction, automotive, and leasing sectors.
Now, Canada is effectively mirroring that evolution.
For companies operating in both jurisdictions, this means compliance frameworks — from beneficial ownership to cross-border reporting and traceability — must be harmonized.
In practice, Canadian manufacturers with subsidiaries, suppliers, or clients in Mexico will benefit from adopting a single, integrated AML and governance framework that satisfies both FINTRAC and UIF expectations.
📘 For additional context on Mexico’s compliance evolution, see
Mexico’s Enhanced AML Legal Landscape: What Canadian Businesses Need to Know
and
Common Compliance Errors by Foreign Companies in Mexico.
🔹 7. What productive companies should do now
✅ Assess non-financial compliance risks.
Map operational exposure under the PCMLTFA, especially in financing, exports, and procurement.
✅ Implement proportionate internal policies.
Even a lightweight compliance manual covering beneficial ownership, transaction review, and sanctions checks can make a difference.
✅ Update contractual clauses.
Include AML/ESG obligations in supplier and partner agreements.
✅ Coordinate Compliance + Finance + Procurement.
Silos no longer work — AML risk cuts across all business units.
✅ Train decision-makers.
Executives and managers must understand how these October reforms affect their corporate responsibilities.
🔹 8. Conclusion: Compliance is now part of business continuity
Canada’s October 2025 reforms mark a fundamental shift:
compliance is no longer a sector-specific obligation — it’s a condition for doing business.
For industrial and manufacturing companies, the challenge is not simply to meet regulatory expectations, but to demonstrate traceability, transparency, and effective control throughout their operations and supply chains.
In this new landscape, governance and compliance are not parallel functions —
they are the infrastructure of corporate credibility.
🧾 References
- Torys LLP, Recent Developments in Anti-Money Laundering Regulation, Q4 2025.
- FINTRAC, Upcoming Regulatory Changes, March 2025.
- Government of Canada, Bill C-2 – Strong Borders Act, June 2025.
- Blakes LLP, Canada Accelerates Amendments to its AML/ATF Regime, March 2025.
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